On-Premise telephone system is what some will refer to as a PBX, Key System or simply a telephone system. Not to get too technical, an on-premise system is when your telephone system is a physical device in your building. These system types can be on premise VoIP or digital. With on premise VoIP you will have dial tone from a traditional teleco, cable provider, or SIP trunk provider. This dial tone will come directly into your location and connect into the phone system.